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Sunday, September 4, 2016

Vladimir Putin at Eastern Economic Forum

Eastern Economic Forum

Vladimir Putin took part in the plenary session
of the Eastern Economic Forum. This year, representatives of 35
countries applied to attend the forum. In total, delegations
from 56 countries are taking part.

September 3, 2016

08:20

Russky Island

The Eastern Economic Forum (EEF) was established
by a Presidential Executive Order in 2015 to promote
the accelerated economic development of the Russian Far East
and the expansion of international cooperation
in the Asia-Pacific region.

The EEF focuses on enhancing the investment appeal
of the Russian Far East and offers broad opportunities
for cooperation between Russian and foreign business partners.

* * *

Moderator of discussion at the plenary session
of the Eastern Economic Forum, former Australian Prime Minister Kevin
Rudd: President Putin, Prime Minister Abe, President Park, and to our
distinguished guests here at Vladivostok and to you,
the delegates at the Eastern Economic Forum. My name is
Kevin Rudd, and I am President of the Asia Society Policy Institute
in New York. It is good for me to be back in Russia, it is
good to be here in Vladivostok, Russia’s Pacific capital, but
as well, it is good to be here, at this Eastern Economic Forum.

I am told, Presidents and Prime Minister, that we have one and a half
thousand delegates here from many countries across the region, and we
have most of those delegates from the business community. And so
therefore, we are here to discuss the central theme of the future
economic development of the Russian Far East.

We are also here at a time of great global challenges. We
are here at a time when we have tensions in geopolitics, new
tensions, we have changes in global geoeconomics, we have
the continuing global challenge and rising challenge of global
terrorism, we have of course a slow and sluggish global economy,
which has not fully recovered from the crisis of nearly ten years
ago. We have a global problem of unemployment,
and in particular global youth unemployment, before we even encounter
the impact of the new technologies on employment
in the future.

So we are particularly privileged at this time when we see great
global challenges requiring strong global leadership and strong global
institutions to have these political leaders with us today. And we
are doubly privileged to have them with us today because each of them
is now in the next 24 hours heading to Hangzhou in China
for the G20. And the eyes of the world will be
on the G20 in China to see what contribution that gathering
can make to rejuvenating the global economy, which affects each
and every one of us here.

So, thank you, Prime Minister Abe, thank you, President Park,
and thank you to our host, President Putin, for having us here
in the great city of Vladivostok.

We are going to begin with addresses by the three
political leaders and then we will move to an open forum.
And if we could begin by inviting the President
of the Russian Federation, His Excellency Vladimir Putin,
to deliver his formal remarks to this, the second, Eastern
Economic Forum. Mr President.

President of Russia Vladimir Putin: Ms Park Geun-hye, Mr Shinzo
Abe, friends, ladies and gentlemen. Welcome to Vladivostok,
to the second Eastern Economic Forum, which brings together over
3,000 participants from 35 countries this year.

For us this means a growing interest to Russia
in the political and business circles
of the Asia-Pacific and other regions; an interest
in our Far Eastern agenda in general, our steps and initiatives
that open up new possibilities for cooperation and the implementation
of lucrative projects in the Far East.

We have set ourselves a big goal, ambitious in every sense,
a huge-scale task: to make the Far East one
of the centres of Russia’s social and economic
development – a powerful, dynamic and advanced region.
As I said, this is one of our most important national
priorities.

We can already see real change here – only the first, but
nevertheless significant and encouraging results. For example,
industrial production in the Far East grows at a more than
5 percent rate; growth has been modest across Russia at 0.3 per cent, but
in the Far East we had 5 percent.

Over the past year, the region has additionally attracted more
than 1 trillion rubles of investments – about $15 billion,
and more than 300 investment projects were launched here. This means that
the business support policies we proposed enjoy demand.

Finally, there is the main consolidated and most valuable
indicator of ongoing changes in the Far East –
the emerging positive demographics. For the first time
in a quarter century, Khabarovsk Territory, Sakhalin, Yakutia
and Chukotka have seen an increase in population.
For the third year in a row, the birth rate
in the Far Eastern Federal District exceeds the death rate,
and fewer people are leaving the Far East.

There is population outflow, regrettably. However, it went down 3.5-fold
for the Far East Federal District as a whole over
the first half of this year. It is true that the demographic
results are still modest, but they do demonstrate an emerging trend
and we must now build on this trend and make it irreversible.

Over the next three years, we must achieve a sustained growth
of population in the Far East. I remind the Government
and all ministries and agencies that our state programmes must also
focus on this task, especially economic, social and demographic
programmes, our housing policy, healthcare and education.

Ladies and gentlemen, the strategy for developing
the Far East is based on openness to cooperation
on a broad international level, all the more so
as the Far East is literally at the epicentre of dynamic
integration processes.

We are working consistently to develop the Eurasian Economic
Union and expand its international ties. In October this year, Moscow
will host the second round of talks on a trade
and economic cooperation agreement between the EAEU
and the People’s Republic of China. This will lay
the foundations for a comprehensive Eurasian partnership
in the 5 plus 1 format.

The trade and economic agenda within the Shanghai
Cooperation Organisation is also becoming more substantial and promising
all the time. The upcoming accession of India and Pakistan
as full members of the organisation, and, I hope, Iran
in the future as well, will add to these opportunities.

In short, several integration tracks are taking shape
in the Eurasian region today. They flexibly complement each other
and enable us to carry out projects on a mutually
advantageous basis.

We believe that this integration network and the system
of multilateral and bilateral agreements, including those
on free trade zones, could become the foundation for developing
a big Eurasian partnership. We discussed this very idea
at the St Petersburg International Economic Forum this summer.

We believe that effective integration is possible only
on the basis of equal rights of all participants
and respect and consideration for each other’s interests without
any political or economic pressure or attempts to impose
unilateral decisions. As we understand it, integration is about
predictable, long-term rules and openness to cooperation with other
countries both in the East and the West. We are ready
to study counterproposals attentively and look for the best
possible solutions with anyone who is interested in such cooperation.

We realise that these are big, ambitious, complex and long-term
tasks. The project I refer to can be carried out only within
the framework of a flexible multi-level model using innovative
solutions and working in the interests of economic growth
and greater prosperity for people throughout this vast region.

The driving force behind this integration will be business energy
and initiative and its obvious and ever-growing demand
to remove barriers and create big markets with
a business-friendly environment.

This integration must also be based on serious joint projects,
which will sew the seams of our economic space and create new
development resources. I would like to mention a number
of these projects and opportunities now.

First is a reliable energy infrastructure. We support
the initiative of Russian, Japanese, South Korean and Chinese
companies to create a super energy ring linking our countries
as one. We propose setting up an intergovernmental working group
in order to move ahead more rapidly and dynamically on this
project. Let me note that Russia is ready to offer its Asia-Pacific region
partners competitive energy rates and long-term fixed price contracts.

Second is transport infrastructure and the formation
of new, competitive trans-Eurasian and regional transport routes.
Examples here are the Primorye 1 and Primorye 2 transport corridors, which
lay the shortest route for moving goods from China’s northeast
provinces to the ports in southern Primorye Territory,
and the construction of the Russian section
of the Europe-Western China route. I will be discussing
the development of this and other transport infrastructure
routes with my colleagues at an upcoming State Council Presidium
meeting very soon.

Third. We are living in an age of information
and rapid development of digital, telecom and Internet
technologies. We have to seize the opportunities they offer
to promote cooperation, so that our countries’ governments
and companies could do business and interact
in a convenient electronic form.

Therefore, we suggest creating a common digital economic space. We
are talking about the creation of legal and technological
conditions for electronic interaction. I would also like to ask
the Russian Government to submit a detailed plan of this
work.

In fact, some good things have already been done here.
The Eurasian Economic Commission is supervising the development
of an integrated information system – a system
of cooperation in transport, trade, customs, veterinary, tax
and other procedures.

Fourth. We need human resources and technological groundwork
for the future. In this regard, we invite partners to join
the project to build an international science, education
and technology cluster on Russky Island.

We plan to put together a support system for start-ups
here, including venture capital financing, to organise a network
of laboratories for collaborative research, and to create
a modern business infrastructure, including business and exhibition
centres.

We would like professors and students from other countries
to come to Russia, as well as research, creative
and project teams from other countries. As far as I know,
2,500 international students are already studying at the Far Eastern
Federal University, and dozens of faculty members from other
countries teach here.

A few hours ago, my colleagues and I attended
the opening ceremony of the Far Eastern Oceanarium. This is not
just a commercial centre, but a science, education
and information centre, and we hope it will also serve
as a good base for the study of marine biology
at the level of leading scientists in the region
and around the world. And I ask the Government
to speed up the development of a comprehensive development
programme for Russky Island.

Ladies and gentlemen, the projects I have just mentioned
reflect the full diversity of opportunities for joint work
in the Far East. We are creating the best possible conditions
to make this region a centre of investment appeal
and a platform for cooperation.

Starting October 1, a one-step system will start operating
in the Vladivostok free port for all border-crossing procedures.
The checkpoints and electronic declaration of goods systems will
be working round the clock.

I met yesterday with business representatives. I know that not
everything here is working exactly as we want it, but we took in your
comments and will make the necessary improvements to our work.

The Government is already at work on plans
to simplify visa procedures for foreign citizens arriving
at the free port. The plan is for people to complete
all the formalities via the Russian Foreign Ministry’s internet
service and obtain an electronic visa.

In addition to Vladivostok, we recently decided to extend
the free port regime to another four Far East ports – Vanino
in Khabarovsk Territory, Korsakov on Sakhalin,
Petropavlovsk-Kamchatsky in Kamchatka Territory, and Pevek
in Chukotka. We will add more if necessary.

At the meeting with business representatives I just
mentioned, we heard that this is not enough and that some business
representatives have not received the breaks they were expecting. We will
certainly examine further all of these issues.

Yesterday we also discussed work in the priority development
areas and raised a number of issues concerning procedures
for obtaining profit tax breaks.

I do agree that we should take into account each project’s specific
nature, scale, and implementation timetable. I think that
the tax holidays should be extended for big long-term projects.
I discussed this matter yesterday with the Finance Minister,
and the Finance Ministry agrees in general to this idea. I ask
them to draft the relevant amendments to the law
as soon as possible.

We are sure that there will be many big and significant projects.
The Far East offers an excellent location and natural resources
with direct access to the most promising global markets. This offers
inexhaustible opportunities for business initiative.

At the same time, we should give companies
the opportunity to attract affordable financial resources. This is
the task that the Far East Development Fund is currently addressing.
The Fund issues loans at five percent annual interest in rubles.
The demand is high, with businesses literally queuing up. To avoid
holding back the launch of new projects and provide them with
sources of financing, we have to constantly focus
on the Fund’s capitalisation support.

Of course, we are facing the overall task of developing
an extensive financial and investment infrastructure
in the Far East. Such projects are already underway. At this
forum, you can see the presentation of a new investment system,
Voskhod. It opens direct access to Far Eastern companies’ shares
and bonds for Russian and foreign investors.

An agreement has been signed on the forum sidelines
between Russia’s Far East Agency for Investment Promotion and Export
Support and one of the world’s largest banks, the Japan
Bank for International Cooperation. A joint platform will be created
to attract Japanese investors to the priority development areas
and the Vladivostok Free Port.

The Russian-Chinese Fund for Agro-Industrial Development,
which has started its work this year, is a good example of mutually
beneficial investment cooperation. The fund supports export-oriented
projects in agriculture and the food industry.

I am confident that the Russian Far East, with its land
and marine resources, can become one of the major suppliers
of quality and eco-friendly foods in the Asia-Pacific
Region, an area that is home to almost 60 percent
of the world’s population.

To our partners from Japan, the Republic of Korea
and other countries, I propose establishing similar joint investment
platforms. They could focus on financing projects not only
in agriculture but also in industry, high technologies
and natural recourses development – in short,
in the sectors that have a vast potential.

At the same time, we must combine access to our natural
resources with investment in their processing. I ask
the Government to develop and implement such a mechanism
for the Russian Far East. The approach should be simple: if
a company wants to receive a priority right to the use
of raw materials, aquaculture or forest plots,
or to develop mineral deposits, it has to put effort into building
plants, contribute technology, and create new jobs and higher added
value.

Friends, the future of the Russian Far East is
inseparable from the future of Russia. This is what our ancestors
believed, and they explored Far Eastern lands and brought glory
to the Fatherland. We have begun a new historic period
of developing the eastern territories, and it is planned
for decades ahead.

The tasks to be resolved in the Far East are
unprecedented in scale and importance. We are fully aware of our
tremendous responsibility to our citizens and future generations.
I am absolutely certain that we will carry out the plans I have
outlined here. I believe in the Far East’s success.

Thank you for your attention. Thank you.

President of the Republic of Korea Park Geun-hye (retranslated):
President of the Russian Federation Vladimir Putin, Prime Minister
of Japan Shinzo Abe, members of government delegations
and business communities, allow me to begin by congratulating
you all on the opening of the second Eastern Economic Forum
in Vladivostok, the centre of the Russian Far East.

The Far East is a treasure trove of diverse energy
resources, including oil and natural gas. Asia and Europe meet here
and the region is the starting point for transport routes
and freight arteries across the Eurasian continent. It would be no
exaggeration to call this region Russia’s new heart.

The great writer Dostoyevsky said that Asia would play a big
part in Russia’s future and this showed his foresight with regard to the Far
East. Currently, North Korea leaves us with a break in the chain
that makes it hard to realise in full the Far East’s tremendous
potential, but in the future, when these links are joined together
once more, the Far East will become a bridge of peace
and prosperity linking Eurasia and the Asia-Pacific region.

I hope that the Eastern Economic Forum will become a good
platform for comprehensive dialogue and for concentrating
knowledge on the task of making this idea reality.
The leaders of three countries, the Republic of Korea,
Russia, and Japan, are taking part in this forum, as are
high-level officials from other countries, and this offers good
opportunities for strengthening political will and cooperation in this
region.

Ladies and gentlemen, we see today a slowdown in global
economic growth and a trend towards protectionism and new
isolation, and this creates added uncertainty. At the same time,
two opposing forces, integration and separation, intersect, and this
creates chaos.

The European Union achieved the highest level
of political and economic integration, but it now faces challenges
following Britain’s decision to withdraw. At the same time,
in the Asia-Pacific region, integration gathers pace and countries
are building stronger ties with each other. The international community
has come to a crossroads: to take the road
of separation and isolation, or to choose the path
of openness, integration and ties. The shape of our future
depends on the choice we make.

A policy of separation and isolation would be
the wrong choice. History has taught us this. During the Great
Depression, countries raised customs duties and the result was that
trade fell by more than 40 percent in just four years. After
protectionist measures were introduced in the 1980s, trade that had
been growing at an average rate of 20 percent fell to just
5 percent.

We cannot achieve sustainable global economic growth if we raise
barriers and choose separation and isolation.
On the contrary, we must raise the level of integration,
link our networks together and create a platform for global
economic cooperation. On this basis, through ongoing innovation
and opening our markets, we must create a new driving force
for building the future.

Ladies and gentlemen,

The Far East offers opportunities for economic ties
and human contacts as well as good industrial organisation. This
potential makes the region a promising new place for carrying
out integration and growth initiatives. President Vladimir Putin is
carrying out a new eastern policy that is injecting new life into
the region and developing its potential in a vision that
can become reality.

The Republic of Korea is also paying great attention
to the Far East. Above all, I note that trade between South
Korea and the Far East accounts for 40 percent of our
overall bilateral trade. Sixty-percent of Russian tourists visiting South
Korea come via Vladivostok. The Far East is thus a bridge linking
the Republic of Korea and Russia.

The ASEAN countries, including Japan and China are also making
efforts to develop this region through various development
and cooperation projects. There has been progress, but we still have work
to do together to fully develop the Far East’s potential
and ensure sustainable growth. In his speech at the first
Eastern Economic Forum, President Vladimir Putin stressed the importance
of social and economic development in the Far East
and Russia’s effective integration into the Asia-Pacific region.
Keeping this view in mind, we need to concentrate on three main
cooperation areas.

First, to activate Far East development, we must put in place
an environment that will ensure the region’s sustainable development,
in particular by strengthening cooperation in foodstuffs,
housing construction, healthcare and medical services. We need to get
more players involved. In this context, we are ready to work with
Russia to come up with specific measures for carrying out joint
projects in agriculture based on modern technology in Primorye
Territory, including projects to build agroindustrial facilities.

In the fisheries sector, the Republic of Korea could
take part in a project to build refrigerated warehouses
and fish processing facilities and make a contribution
to developing the Far East’s fisheries industry. Korean companies
also have great experience in housing construction
and by getting involved in big housing construction projects,
Korea could help to improve the region’s housing situation. Korean
medical facilities use advanced technologies based on ICT (information
and communications technologies) and could provide quality medical
services, which would of course boost the level of healthcare
and medical services in the region.

Secondly, to diversify the Far East’s industrial structure, we
need to build an infrastructure and make sure that all projects
develop naturally and independently in accordance with economic
principles. The Far East’s economic structure is currently centred around
energy resources development, but given the region’s geographical location
favourable for logistics development, it has great potential
for growth through industrial diversification, as the Far East
is located so close to the Northeast Asia economy.

If we marry South Korean capital and processing technology
to Russian fundamental science and resources, this would enable us
to create a competitive industrial base. Furthermore, cooperation
between Korean and Russian businesspeople on infrastructure
development, including transport and port infrastructure, we can develop
a new multimodal logistics route that will unite the Eurasian
continent.

In particular, the Northern Sea Route opens up new
opportunities for cooperation in sustainable resource development.
The project to build rapid intercity transit routes
in the Far East and projects to improve city infrastructure
also offer good opportunities for cooperation because South Korea has
the needed experience and technology for carrying out
environmental projects, including technology for processing the waste
generated in the process of developing city infrastructure.

At the Korean-Russian summit in November 2013, President
Putin and I agreed to develop joint investment platforms with
the aim of stimulating bilateral investment in the Far
East. Korean and Russian companies can work together in promising
areas and use the investment platform to carry out favourable
projects.

Thirdly, we can accelerate the Far East’s development
and maximise the results if we broaden the cooperation spectrum
by linking the Far East to the neighbouring countries’
economies. We can use the Northeast Asia countries’ different Eurasian
concepts and initiatives as a basis for spreading
the energy of advantageous cooperation in the Far East
across the entire Eurasian continent.

The Korean government wants to turn Eurasia into
a continent of unity, creativity and peace. This is how we see
promotion of cooperation with the Eurasian continent.
At the St Petersburg Economic Forum in June, President Putin
proposed establishing a big Eurasian partnership. This is a vision
for integration across the entire continent and it fits with our
own Eurasian initiative too.

The Republic of Korea is a country that has signed
free trade agreements with the United States, China and the EU,
so if we are able to enter into a similar agreement with
the Eurasian Economic Union, in which Russia plays a key role,
it will lead to increased economic integration in Eurasia, revive
the development of the Far East, and will also promote
the benefits of the region’s advancement across
the continent of Eurasia.

At the same time, we need to get some practical results
of cooperation on a mutually beneficial basis. We must make
efforts to develop multilateral cooperation in the region
through building trust. Right now, North Korea’s frequent provocations hamper
trilateral projects, including the Rajin-Khasan logistics project.

However, if these barriers are eliminated it would be possible
to resume these projects on an even more ambitious scale,
between three parties: Korea, Russia and Japan, or Korea, Russia
and China. This will create an environment where all networks are
interconnected – electricity, railways and energy,
and in the long run, this will contribute
to the effective integration of the Far East
and to the region’s prosperity.

Ladies and gentlemen, peace and stability
in the region is an absolute prerequisite
for the sustainable development of the Far East
and the regions’ integration. In this context, I cannot ignore
the issue of North Korea, which is a key node in Eurasia
and the most serious threat in the region.

Despite the repeated warnings of the international
community, North Korea has conducted four nuclear tests since
the beginning of this year and launched ballistic missiles.
Pyongyang does not recognise the UN resolution, calling itself
a nuclear power in the East, threatening nuclear strikes
and continuously improving its nuclear and missile capabilities.
After the nuclear test, North Korea has already launched 19 ballistic
missiles, which means it has launched a rocket every two weeks, which
exceeds the number of rocket launches over 18 years under Kim
Jong-il's government.

The ballistic missiles that fall in the eastern sea are
a threat to ships navigating there, including Vladivostok. North
Korea’s regime ignores human rights and its people’s right to quality
life, focusing all resources on the development of nuclear
weapons and ballistic missiles. If we fail to prevent
the development of nuclear weapons in the near future,
the North Korean nuclear threat will become a reality.

I am confident that this forum will become a significant
platform for dialogue aimed at joining forces to open a new
page for an integrated Eurasia, for prosperity and peace
in the region. I hope that in the future, this forum
and our dialogue will emanate the energy of openness, change
and innovation throughout North-East Asia.

Thank you.

<…>

Kevin Rudd: Arigato gozaimasu, Abe-san. If I got the message
right, I think you want to see a peace treaty between Japan
and Russia. I think that was a subtle message
at the end of your speech. Also, Abe-san, congratulations
on your Mario performance at the closing of the Rio de
Janeiro Olympics. This was worthy of an Oscar. And it’s good
to see that Mario from Nintendo has made his way from Rio de Janeiro all
the way here to Vladivostok.

The questions that you raised, both President Park and Prime
Minister Abe, about Vladivostok and the future I think are
interesting to all of us. This audience is made up
of businesspeople – investors, traders, people who want to see
future economic opportunities become a reality. So, let me turn
my initial questions to our host, President Putin, and it begins
about this city, Vladivostok. I share the enthusiasm of Prime
Minister Abe from my first visit here. In Australia, we have
a place called Sydney Harbour. It is quite spectacular. It is one
of the most spectacular natural harbours in the world. But
in my 36 hours here in Vladivostok – here
in Vladivostok you have a genuinely spectacular natural harbour
as well. And so the challenge lies with its future economic
development.

Mr President, as a kid growing up in rural Australia
I lived on a farm, and in Australia we are used
to vast distances, vast expanses, and vastness. But when I look
at the map of Russia, and as a kid I used
to look at the map of the old Soviet Union, this vast
expanse east of the Urals and here in the Russian Far
East. If we think Australia is vast, this is mega vast. In fact,
I looked at the numbers just before we came on stage: we
can fit two entire continents of Australia into Russia east
of the Urals. And in the Russian Far East we’ve almost
got one continent of Australia in terms of size.

Yet here in the Russian Far East you still, as you have
indicated, got a population about the size of Singapore. So
therein lies the challenge that you have pointed to.
In my country, we call this the tyranny of distance, which
is small population, huge territory, vast distances between people
and markets. You obviously share a common challenge here. So, Mr
President, I’ve listened very carefully to your strategy
for developing the Russian Far East. On the core question
of population and getting people to come here, to stay here
and to prosper, could you expand further on the challenge
of population growth here. I listened very much to what Prime
Minister Abe had to say about helping through cooperative projects
to build, rebuild and expand the city of Vladivostok
itself, but if I could ask you further to expand on that most
basic of challenges. Over to you, sir.

Vladimir Putin: First of all I would like to thank
the President of the Republic of Korea
and the Japanese Prime Minister for their emphatic
and informative presentations. I enjoyed listening to you,
and was both pleased and interested to hear your proposals. It
is good that you have not only heard us, but also proposed your own versions
of cooperation. Without a doubt, we will respond to them, we
will make every effort to bring to life everything you and we
speak about.

Now, regarding the potential of the Russian Far East
and the problems that exist here. Indeed, one cannot disagree with
the pioneers who discovered these places – these are truly amazing,
beautiful, unique places. I would like to note that we are certainly
grateful to our ancestors for the discovery and development
of these areas.

However, I must say that for many decades, if not centuries,
these areas have not been given enough attention. Attempts have been made
in the past century, even during the development
of the Western, partly Eastern Siberia; yet, we never got around
to developing the Far East. Strange as it may sound, we hardly
even had a good motorway linking the European and Far Eastern
parts of our country. We never had one. A project was started
in the 1960s, but was abandoned later. Only recently did we complete
this project. For the first time these territories were linked
to the European part of the Russian Federation
by a motorway. This is my first point.

Second. Actually, the city of Vladivostok was founded
and developed… if I may even use the world “developed.”
I would rather say it merely existed here as a military base
and a closed city. Hence all the problems that have been
accumulating here for decades: an undeveloped infrastructure,
a lack of primary energy sources and a lack
of transport infrastructure in general.

All this, of course, is in stark contrast with this region’s
potential. Huge mineral reserves are concentrated here. Well,
for instance, it accounts for 20 percent of our oil reserves,
about the same amount of natural gas; 70 percent of Russian fish
is caught in these waters, and 75 percent of Russia’s forest
resources are concentrated here as well. Eastern Siberia produces 75
percent of Russian diamonds and 30 percent of gold. This volume
is hard to imagine.

I know that this is not enough. The region does need
a new infrastructure, which I mentioned, it needs energy, finance,
technology and a highly skilled workforce.

What are we doing to let this region truly breathe free, gain new
vigour and make the most of its development prospects? We have
taken a whole package of measures over these last years
to implement our plans. What are these measures and what do they
involve? First, we have introduced a whole system of preferences and exemptions
for business in the region. This is particularly the case
of what we have dubbed the priority development areas.

First, we analysed the experience of countries such
as China, South Korea and Singapore, and we offer those who
looking to work in the Far East a whole range
of preferences, starting with tax holidays. For example, businesses
are exempted from federal profit tax during the first five years
of work. There are also regional tax breaks (on payments
to the social funds, for example, accelerated return
of value-added tax, and simplified administrative and customs
procedures).

Second, as you have already heard here, we established a free
port regime, first in Vladivostok and then in five other Far
East ports. The free ports also offer a big range of benefits
similar to those in the priority development areas. They also
offer more effective work with the customs service and border guards.

As I said, I met yesterday with my colleagues
and with members of the business community. We heard their
comments and concerns and will make the necessary adjustments.
In any case, we are putting into place the conditions they need
at the ports and improving the port facilities.

Finally, we established a fund specifically for Far East
development. It provides quite long-term and relatively cheap financial
resources at a 5-percent interest rate. Of course, we must add
more and top up the fund’s capital, but we have taken the first
steps and the work has begun.

Another of our substantial measures concerns infrastructure. We
decided and have already begun to subsidise businesspeople who build
infrastructure facilities independently. I think that this package
of measures should make it possible to work effectively
in the Far East for those wishing to do so.

I mentioned the free hectare of Far East land
at the start of my speech. Under this programme, we make
a hectare of land available for free (as you can see,
the region is not at all lacking for land) for people
wanting to start their own business or develop the site.

There are many areas for cooperation and there are projects
to build on. It would be wrong to say that the region is
starting from scratch. If you look, you see that back in the Soviet
period, we already developed aircraft manufacturing in the city of Komsomolsk-on-Amur,
for example. True, this is military aircraft manufacturing, but
the general skills are there, and they produce the Su fighter
planes known all around the world.

We are well aware that we should not and cannot limit ourselves
to selling arms alone, and this is why we are working, chiefly with
our Italian and French partners, on developing manufacturing
of civil aviation aircraft. The promising medium-haul Superjet-100 is
produced here, for example.

We had already started developing a shipbuilding cluster
in the region. Two years ago, I was here for the start
of operations and the inauguration of what is really
an enormous shipbuilding enterprise that will produce civilian vessels in specialised
areas in which we really do have the skills, skills that we must
continue to develop, of course. These areas include civil vessels
with icebreaking capability, and specialised vessels for serving
offshore drilling platforms, and for working
on the Northern Sea Route, which President Park spoke about. We will
develop this most economic route for shipping goods between Asia
and Europe.

We are also developing our space sector activity here. We recently
inaugurated Russia’s new space launch centre, Vostochny, in Amur Region,
one of the Far East regions. The first launch has taken place
and we will expand it to handle light, medium and heavy rockets.
This is also a platform for international joint activity
to develop outer space and offers excellent prospects.

We are developing not just the space launch centre
(the first part of which is already complete), but are building
a whole cluster and a town with all the needed social
infrastructure for those who wish to work here.

Of course, the region also offers the resources
I already mentioned, hydrocarbons, oil and gas, and traditional
resources such as timber and fish. These are all areas in which
the region has longstanding experience and we just need to take
them now to a higher level. We need to not just work
on production and export, but also on adding value to our
products – this is clear. It is for this reason that we are
developing the priority development areas, the Vladivostok free port
and other measures in order to attract Russian and foreign
business.

But to make it all work efficiently, we definitely need
highly-qualified personnel. Our event is taking place at Far Eastern
Federal University, which was established only two years ago. We are working
from this perspective – as I mentioned, 2,500 foreign students
study at this university and dozens of foreign teachers work
here. Last year, I was told that people from foreign countries are waiting
to work here, and I’m very happy about this. Of course,
constructing such beautiful university buildings was not enough; we have
to provide highly-qualified personnel and talented young people
to meet the demands of the growing labour market.

There is another side of this that we should remember. To do
all of this and to make people want to live here, raise
children and feel that their children have a future here, another
goal has to be met – creating not only a modern living
environment but also a cultural environment. There is a very good
music theatre here. I’m grateful to the Mariinsky Theatre, which has
opened a branch here. The first festival has recently debuted with
great success, with a great number of people from Primorye
and Vladivostok, as well as from foreign countries –
primarily Japan, the Republic of Korea and the People’s
Republic of China – that are interested in attending these
concerts.

We intend to open branches here from St Petersburg’s Hermitage
Museum, the State Russian Museum, and the State Tretyakov
Gallery. I think that a local museum dedicated not only
to Primorye but to the entire region,
and the neighbouring countries, should also be considered.

Science and education should be developed. My colleagues
and I have just visited the newly opened scientific centre
for marine biology research. This has traditionally been developed since
the Soviet era. I believe we have made a major step forward
by creating a very good base and physical infrastructure. This
will be a scientific and education centre. We will certainly succeed
if we follow through on all these areas.

Thank you.

Kevin Rudd: Thank you, Mr President. In fact, I had
the opportunity yesterday to walk around this campus. It is pretty
impressive. I think a lot of university presidents around
the world will be envious of the infrastructure that’s been put
here very recently. And to confirm, the teachers here told me
that you are getting faculty from around the world, you’ve got a couple
of Australians arriving I think next year. They will be interested
in the beer supply as well.

I am also interested, Mr President, in the other aspects
of what you have talked about. You have mentioned the fact that you
received expressions of concern from a number of businesspeople
about the difficulty in getting visas, and visa access etc.
And I certainly recall the experience of a friend
of mine from Hong Kong. We were all APEC members here but the use
of the APEC business card has not been as effectively recognised
at Russian border posts as it could be. And I think that
would be a huge thing to help for the future as well.

On the plan that you have outlined – it’s
an impressive plan. The study that has gone into, for example,
the Chinese special economic zone experience. It is solid study. Free
ports? The Chinese experimented with those successfully. Special economic
regions you were talking about, the areas, all thirteen of them.
And having lived in China when they first did those things back
in the 80s, it really was a twenty year period before you saw
the product of the initial investment. And then —
history speaks for itself.

Let me put you another observation, Mr President, for your further
reflection, and something which comes from a number
of the businessmen here. They’ve looked at the plans,
they’ve looked at the tax concessions being offered
in the free ports and in the special economic areas,
but they also ask this question about long-term investor confidence, i.e. that
the rules won’t change here in Russia for the future, they
ask questions about the consistency of the implementation
of regulations, and about bureaucracy. So, given these concerns
raised by businesspeople from around the region, around
the world, again if I could invite your comments specifically
on this question, of if you’re speaking to a group
of investors, and their baseline concern is confidence
and long-term policy and regulatory consistency, here
in the Russian Far East, what would your response be?

Vladimir Putin: This is precisely what we discussed yesterday. We
discussed these plans, which have been thought through carefully and are
long-term. I think you can all rest assured that we fully intend
to make every effort to carry out these plans.

We realise there are some things that are quite fundamental for business
development. Tax breaks, of course, which we have introduced.
Of course we would like for the entire Russian Federation
to offer equal conditions for all economic actors and become
a most attractive place for business development, but we realise that
this region has some particular circumstances that require special attention
from the authorities, and this is why we have decided to offer
such big preferences here.

We also see that this is far from enough. The authorities must make
an effort to resolve fundamental issues such as infrastructure
and energy supply, communications and human resources. We have
long-term plans for each of these areas.

Our company heads are sitting just over there. There is the head
of Gazprom, for example. If need be, he can tell our partners about
Gazprom’s plans and our other oil and gas companies’ plans
to develop the energy infrastructure.

Yesterday, the businesspeople talked about how tariff differences
can be fatal for business and stifle their development here. It is not
good for ordinary people and it is not good for business either,
and this is why we have come up with these long-term plans
for the years ahead, not just in gas production
on Sakhalin, for example, but also in developing pipeline routes
in the Far East regions and distributing energy resources among
the economic actors and the region’s households. Gazprom’s
subsidiary company has already sent a plan for connecting people
to the gas network to the Primorye Territory authorities
and will do the same in the other Far East regions. We will
certainly carry out these plans.

We will carry out projects for developing communications
infrastructure in several areas, given the region’s vast size.
The first area is satellite communications. Khabarovsk, which is the Far
East’s official administrative centre, already has the satellite
communications centre offering access to broadband internet and so
on.

The second area is fibre optic communications. We have already
carried out a project to link Sakhalin, Magadan and Primorye
Territory with fibre optic cables. I don’t recall exactly if
the cable has been laid to Magadan yet or not, but I think
it has. In any case, the work on the coastal facilities is
already complete, the stations and coastal infrastructure are
in place and a cable reaching 1,800 kilometres has been laid.
This will all start operation and will give people the basic
conditions they need not just for daily life but also for business
development. These are long-term undertakings that have been calculated in our
plans and our budget planning.

Kevin Rudd: Thank you very much, Mr President. Prime Minister Abe,
I listened very carefully to your remarks just before, and you
are a genuine enthusiast for the development
of the Russia-Japan relationship. Those of us who follow these
things internationally read very carefully your eight bullet-points
at Sochi, and those of us who follow international relations
would have observed carefully your cry from the heart today about
developing a peace treaty, and agreeing one, between Japan
and Russia after all these years, and despite what was almost
achieved in 1956. But it’s time to get on with it.

So you, in the framework of what you want to see
in the future of the Russia-Japan relationship overall,
could you give me a sense therefore of the role of economic
engagement within that framework of trade, and investment between
Russia and Japan, and the particular role which can be played
by, frankly, forums such as this, the Eastern Economic Forum. Prime
minister…

Shinzo Abe: The Russian Far East is developing intensively
and I think that this development will have a very positive
effect on the region as a whole.
As for the Eastern Economic Forum, this is a very important
platform for bringing together all with an interest in developing
the Russian Far East. President Park Geun-hye is here beside me today,
and so are senior officials from many countries’ governments, economic
organisations and academic institutions.

Over these last years, Russia has established a number of new organisations
and institutions, such as the Ministry for Far East
Development, the new special economic zones, and the free ports.
The points that Mr Putin noted in particular in his outline
of the work currently underway in Russia are, I think,
fruitful results of the initiatives he is taking, and these new
organisations and institutions are among these results.

For my part, I would propose making Vladivostok
and the entire Russian Far East a reliable export base
for the Asia-Pacific region. Japanese companies work actively
in this area and I hope this forum will strengthen further
the cooperation between Japan and Russia. This will enable us
to improve the lives of the region’s people,
and I am sure that this will become a new driving force
for Japanese-Russian relations.

Kevin Rudd:Thank you very much, Prime Minister. I noticed
in your government you have a minister with specific responsibility
for Japan-Russia economic relations. And on this trade
and investment relationship between the two countries – if you
could again outline to me how you see this deepening in sectors
in the years which lie ahead. This is obviously a huge priority
for you: you’ve proposed meeting the President of Russia here
on an annual basis. I understand that after Sochi you’ve invited
President Putin to visit your own home prefecture of Yamaguchi
towards the end of this year, which is a beautiful part
of Japan, in my recollection. So again, looking
to the future and the deepening of Japan-Russia trade
and investment relations and integration – how do you see this
evolving?

Shinzo Abe: As for our bilateral relations
in the economic area, we have great potential that we could develop
and we must now identify, realise and make use of this
potential. This will benefit people in both countries and will let us
open a new chapter together. I think that this is work to open
new horizons.

I would propose eight areas as a start for joint
work between our countries. They cover a broad range of areas
in economic life in both countries, industry, human resources
training, industrialisation and raising the level in all areas
of our life.

This is why I appointed a new minister who will be responsible
for Russian-Japanese economic cooperation on the Japanese side.
He will work for Russia and for developing economic cooperation
with Russia. I took this step in the aim of achieving
bigger and clearer results. The cooperation and partnership
between our countries must produce clear results that our peoples will see and welcome.
I think this should be our goal.

The Asia-Pacific region is home to nearly 60 percent
of the Earth’s population, around 4 billion people. We must promote
the ideas of free trade and economic integration in this
region. This could become the impetus for further growth
in Russia and Japan.

Japan’s post-war growth was driven by the export of cars
and electronic goods through free trade regimes. Three-and-a-half years
ago, I decided to take part in the talks
on the Trans-Pacific Partnership, and I think that this is
very important.

In 2012, Russia hosted the APEC summit in Vladivostok,
right here in this hall. This was the moment when Russia showed
the entire world not just the Russian Far East’s attractiveness, but
also its determination to integrate into the Asia-Pacific economy.

I hope very much for wide-ranging cooperation between Russia
and South Korea too, so that we can all work together to become part
of the Asia-Pacific region free trade zone. Thank you.

Kevin Rudd: Thank you very much, Prime Minister. President Putin,
you’ve heard Prime Minister Abe speak about his passion for developing
the Russia-Japan economic relationship. Seeing from Moscow, seeing from
the Russian national perspective – give me a sense of its
strategic importance. I saw your interview just in last 48 hours
where you’ve said on geopolitical questions Russia does not trade
territory for economic cooperation. I’ve seen you said it very plainly
in terms of the ongoing discussions between the two
countries on the southern Kurils and northern territories. If you
had a crystal ball and you were looking ahead five years, what is
the shape of the Japan-Russia relationship that you would like
to see in reality, in practice?

Vladimir Putin: The magic crystal comes under our national
interests. Shinzo [Abe], with whom I established excellent
and trusting relations, said that we have our vision and Japan has
its vision, and each of us looks at the issue from
the perspective of our own national interests. But we do all agree
on one thing, namely, that we need to resolve this issue.

The search for a solution is certainly not easy. It was
not us who created this problem. In 1956, the Soviet Union
and Japan signed an agreement that completely settled
the problem. The agreement was signed and was ratified
by the USSR Supreme Soviet and the Japanese parliament. But
our Japanese partners later decided not to implement this agreement
and then the Soviet Union froze its decision too.

Not so long ago, at our Japanese friends’ request, we returned
to this issue and are ready to examine it. Of course,
settling this issue requires a high level of trust.
As I said in the interview I gave to Bloomberg,
we need to find a formula that would enable both sides to feel
they have not lost out in any way. This is not easy, but we can find such
a solution.

The Japanese Prime Minister proposed eight areas
for cooperation between Russia and Japan, and I think that
this is the only right road to take. Russia and Japan are
natural partners in developing trade and economic ties
and resolving regional security issues, and we are both very much
aware of this. But as I said, we need to find solutions
that would not undermine our relations but would create a solid base
for building up our ties over the long-term perspective.
As I said, this requires finding a solution that would ensure
neither side feels it has lost out.

History shows us plenty of successful examples of this kind
of approach, and I hope very much that we too will provide just
such an example. We want this, Japan wants this, and our foreign
ministers are working hard on this. We will support them
at the political level, and of course, as Mr Abe said,
we are ready to take decisive steps. But all decisive steps must be
thoroughly prepared.

It is already clear today that we cannot let slip the opportunities
we have today. Two big projects are underway on Sakhalin,
for example, Sakhalin-1 and Sakhalin-2. Seventy percent
of the energy resources produced there go to Japan. We are
studying the possibilities for building an energy bridge now.
Of course the Japanese economy has an interest in this
project, and so do we. The Japanese have already decided
to produce car engines in Vladivostok. A Japanese company would
not take this step to its own detriment. We have an interest
in developing our automotive industry too. Our Japanese friends
and colleagues are willing to accept a high degree
of localisation. This has benefits for them and for us
and fits completely with our plans.

We visited the new marine biology research centre today. Japanese
scientists took part in the discussions there, and from South
Korea, and more people will come, scientists, students, people from
research centres and universities.

Of course this is in our interests. Our past should not stop
us from moving forward. But we do need to reflect on how
to settle the problems that are preventing us from moving forward
as fast as we would like. I hope that we will settle these
problems.

assange

At midday on Friday 5 February, 2016 Julian Assange, John Jones QC, Melinda Taylor, Jennifer Robinson and Baltasar Garzon will be speaking at a press conference at the Frontline Club on the decision made by the UN Working Group on Arbitrary Detention on the Assange case.